Russia's X5 Buys Victoria, Deshevo Stores In Kaliningrad Region

By Reuters
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Russia's X5 Buys Victoria, Deshevo Stores In Kaliningrad Region

Russian retailer X5 Group has agreed to acquire Victoria and Deshevo stores operated by Victoria Baltia in the Kaliningrad region, a Russian exclave on the Baltic coast.

'The deal encompasses 118 stores with a total selling space of 92,000 square metres, including leased facilities,' X5 said in a statement, without disclosing the financial terms.

The agreement sees X5 acquire Victoria Baltia, which operates Victoria stores in Kaliningrad as well as in Moscow and the Moscow region.

Victoria Baltia also operates Deshevo stores, two distribution centres and a CASH hypermarket in Kaliningrad, X5 said. The distribution centres have a combined total space of 14,200 metres.

'An Exciting Market'

X5 CEO Igor Shekhterman said the Kaliningrad region was an exciting market with a unique profile, particularly due to it having a limited number of locations to open new stores.


"The deal to acquire Victoria and Deshevo stores will help to consolidate our position in the Kaliningrad region while improving the logistics support for our stores in this market," Shekhterman said in a statement.

Russia's Federal Antimonopoly Service (FAS) approved the deal, but said that X5 could not take over stores in the Dolgoprudny district of Moscow, where its market share for food products exceeded 25% in 2022.

It said Victoria Baltia must transfer stores in that district to third parties before the transaction is completed.

In March of this year, the Russian food retailer said declining profit in its fourth quarter was partly due to the aggressive expansion of its network of discount stores.

The active expansion of the Chizhik 'hard discounter' format is in response to customers increasingly seeking the best value offer for their money, CEO Shekhterman said at the time.

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